Which of the Following Statements Is False

question 184

Multiple Choice

Which of the following statements is false?

• A) Keynesians would not advocate an expansionary monetary policy to eliminate a recessionary gap if they believed that investment demand was interest-insensitive.
• B) Keynesians would not advocate an expansionary monetary policy to eliminate a recessionary gap if they believed the money market was in the liquidity trap.
• C) Keynesians would advocate an expansionary monetary policy to eliminate a recessionary gap if they believed investment spending was insensitive to changes in the interest rate.
• D) Keynesians believe that money wages are inflexible in the downward direction.

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Definitions:

Fringe Benefits

Fringe Benefits are additional benefits supplementing an employee's salary, such as health insurance, paid vacations, and retirement plans.

Winner-Take-All Markets

Markets in which the top performers or companies receive a disproportionately large share of the rewards, and the remaining competitors are left with very little.

Hourly Wage

The amount of money paid for each hour of work.

Dual Labor Market Theory

A theory suggesting the labor market is divided into two segments—the primary (high wage, good jobs) and the secondary (low wage, poor quality jobs) sectors.